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Palm Coast Council Again Warms to City Hall Scheme That Would Snub Voter Permission

| July 31, 2013

City Manager Jim landon likes a repackaged scheme to build a city hall, ostensibly without having to raise taxes to do it. Mayor Jon Netts is thinking about it. (© FlaglerLive)

City Manager Jim landon likes a repackaged scheme to build a city hall, ostensibly without having to raise taxes to do it. Mayor Jon Netts is thinking about it. (© FlaglerLive)

For as long as the Palm Coast City Council and its administration have been trying to build a new city hall—or at least since one such proposal failed overwhelmingly at the polls in 2005—all discussions and proposals have had one thing in common: how to  pull off the deal without asking voters’ permission again.

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Public opposition—and a mayor’s desire for re-election—stopped a renewed push toward a city hall in 2010 and 2011, even without the idea reaching the ballot box.

Yet the council is again warming up to an old scheme repackaged as new to do just that: a big, refinancing of $11 million in loans that would immediately result in a nearly $6 million infusion of cash in the city’s general fund, enabling the construction of a new building, ostensibly without raising taxes.

And without holding a referendum.

The Joys of Refinancing

Although its charter forbids the city to mortgage a capital project of any sort without voter approval (if the mortgage exceeds three years), City Manager Jim Landon is proposing to skirt that requirement by essentially shifting and refinancing an existing mortgage—a pair of loans made to the Town Center Community Redevelopment Agency. That’s the special Palm Coast taxing district that is a separate taxing entity on the books, but not a politically separate one: the five members of the CRA boar are the same five members of the Palm Coast City Council, and the CRA remains a city entity. It is a separate financial entity only in so far as the tax revenue it generates for the most part stays in that district, largely to the detriment of the city’s and county’s general funds  (the county was denied $800,000 in revenue from the Town Center CRA last year.)

CRAs are created to spur development in particular zones. The Town Center CRA owes the city’s general fund the majority of that $11 million loan, and a bank the rest. The refinancing will likely lower the CRA’s overall borrowing costs. And building a new city hall would “save” the city $240,000 a year in rent payments. But building city hall would not be possible without the refinancing. And should that refinancing take place, the city will lose the $240,000 it now earns in interest payments and uses to pay rent on its current city hall. In other words, just as the city claims taxpayers will not be on the hook for a new city hall, taxpayers are not on the hook now for the rent payments on the city’s offices.

And that nearly $6 million infusion of cash into the general fund, if used for a city hall, would deny use of the money for other purposes, from keeping property taxes down to building other public infrastructure or building reserves. The city is looking at that $6 million as free money it can do with what it pleases, and in effect, the city is correct: such general fund money can be used for any purpose (unlike CRA money, which, ironically, may not be used to build a city hall or any municipal building).

But the public has repeatedly recoiled at city council or administration presumptions that the money could be used to build a city hall without voter permission, no matter how solid the pledge not to raise taxes to do so. In the end, if the money is used next year to build a city hall, it would still deny the city that $6 million in a subsequent year when funds are short for other needs, and taxes must be raised then (as they likely will be this year) to pay for those needs. In other words, the pledge not to raise taxes to build a city hall depends on a share of smoke and mirrors, and short memories.

Avoiding A Referendum at All Costs

Landon defended the build-through-refinancing approach in a wide-ranging discussion with the city council on Tuesday. That discussion ended the prospects of a lease-purchase agreement for a new city hall. But it revived the scheme, under new guise, that Landon first proposed in 2010, with the CRA’s repayment of the $5.8 million loan as the centerpiece of the scheme.

The discussion misstated or glossed over several issues that had arisen over the same matter in 2010 and 2011, including the public’s broad rejection of the proposal back then, even in a scaled-down version that did not ask for a tax increase.

David Ferguson. (© FlaglerLive)

David Ferguson. (© FlaglerLive)

“Is the goal to perhaps to pursue this if it makes economic sense without having it put on the ballot for voter approval or voter acceptance?” council member David Ferguson, who was not on the council at the time, asked.

“The idea,” Landon said, “is you put it on the ballot if you’re going raise people’s property taxes and have them pay for it. And if you’re not going to raise their property tax, then, I’ve never seen anybody put something on the ballot to keep your property taxes the same. So that would be the concept.”

“I think you misstate it,” Palm Coast Mayor Netts told Landon. “I don’t think you have to go to the voters simply because you’re raising their taxes. You have to go to the voters because you’re incurring unfunded debt over a period of time in excess of a certain amount of money.”

That’s precisely what the CRA has done, and will continue to do, though by repaying the debt it owes the general fund by shifting borrower—the CRA would replace the loan from taxpayers with a loan from a bank—it enables the city to technically separate itself from the CRA’s debt, and cash in.

“If there is a way to build a city hall and not raise taxes, why haven’t we already moved on it?” council member Bill McGuire asked. McGuire was elected in part because he’s opposed the previous scheme to build a city hall. “Why are you guys trying to shove these taxes down my throat for a new city hall when there was a way of doing it without raising taxes? I’m going to get asked that, I absolutely guarantee it.”

“In all honesty,” Landon said, “because in order to do it it’s complicated and nobody believes you. If you tell them that, they’re going to tell you no. It’s not possible.”

2011 Amnesia

But Landon showcased much of the same scheme in a series of community meetings in 2011, some of which McGuire witnessed, when Landon was proposing a $10 million city hall without the use of new tax money. As McGuire described the experience, Landon  “was lucky to escape with his life.”

The considerably sketchier proposal Landon put forth Tuesday was not much different, except in one essential. Landon said the city hall could be build for $6.8 million, not $10 million (with the extra $1 million coming from building permit fees the city accumulated during the boom years.)

The $6.8 million difference took Ferguson aback.

“As compared to a few years ago when a realistic number was $10 million?” Ferguson asked.

Jim Landon. (© FlaglerLive)

Jim Landon. (© FlaglerLive)

“That was a high number. I made that very clear,” Landon said. “ That was on the high side just to make sure that we didn’t, you know, say it was going to be 6.8 and it ended up being 7.5.”

Landon in community meetings, in several presentations to the city council, and in his own PowerPoint presentations never qualified the $10 million as “on the high side” in 2010 and 2011. In fact, the $10 million was itself presented as an appetizing, much lower-cost, no-frills, 40,000 square foot version of the 2005 proposal his predecessor, Dick Kelton, had made—a 70,000 square foot palace ridiculed by voters and rejected even by Netts at the time.

Suddenly, a Bigger, Cheaper Building

Another astonishing surprise Tuesday: in Landon’s estimation, the $6.8 million building could yield 45,000 square feet and be built for $125 to $150 a square foot. Yet in 2010, when Landon was urging the council to go ahead with the plan then in order to take advantage of low building costs he said would vanish soon, he had set the “estimated cost” at $250 per square foot, “inclusive of building, site work, landscaping and furnishings,” and exclusive of land costs. (There would be no land costs in Town Center, but there would be furnishings and the rest of it. See the 2010 numbers and presentation here.)

“Why now? I think you all know this, but timing is very important,” Landon had said in 2010, citing low building and labor costs. Tuesday, he used almost the same words, this time citing the end of the city’s three-year lease at its City Market Place in a little over a year.


Neither the council nor Landon kick-started the latest move for a city hall. The Gang of Six—six former council members—did in a brief presentation to the council last month. The council agreed to study the notion. Landon seized on the opportunity to refresh his previous plan, sweetening it through the refinancing idea.

The refinancing would not have been possible in 2010 because banks were still reluctant to use CRAs’ base of property taxes as collateral, and the Town Center CRA was not as appealing then as it is now: it’s grown enough to generate $1.4 million in annual tax revenue, thanks to the Target shopping center, the movie theater, a medical center, apartments and two assisted living facilities. The city already refinanced the CRA’s bank loan, lowering the interest rate considerably. The city wants to do the same with the larger loan owed the general fund, thus cutting the CRA’s long-term borrowing costs.

“It would almost be irresponsible not to do it,” Netts said of the refinancing.

“You’re talking about saving tax dollars, millions of dollars, long term,” Landon said.

“Show Me the Money”

“I’m struggling with where this money is now,” Ferguson said. “We loaned it but they bought land, or we bought land, so there’s no money there, other than a loan. So where does the money come from now?”

Landon gave a brief history of the CRA and how its financing works, going back to how and why the city issued the internal loan to its own CRA.

But again, Ferguson pointedly summed up the matter, if extended to include building a city hall: “So is it more accurate to say the construction will be funded by issuing more debt or refinancing, as opposed to Town Center taxes and building fee surpluses?”

No one answered him directly.

Bill McGuire. (© FlaglerLive) palm coast city council

Bill McGuire. (© FlaglerLive)

But there was clarity among council members in one regard. “The no-brainer is to refinance,” Netts said. “The next step I think requires some brains.” He added: “Regardless of the discussion on city hall or where that goes, it still makes good sense to do this refinancing. Does anybody on council see any reason that we shouldn’t? And if you do I got some land I want to talk to you about in South Jersey.”

But refinancing inevitably means a sudden $5.8 million windfall for the general fund, a huge chunk of money that equates to a quarter of the property tax revenue the fund collects a year. That money in the past was always pegged to capital projects, but not a city hall.

The council will take up the refinancing and Landon’s latest city hall ideas either late this year or early next year, giving the administration time to gather its facts and—as such things go at city hall-prepare the way in one-on-one meetings with council members, out of public view. Some council members wanted the two notions packaged as one. McGuire was opposed, wanting the two discussed and voted on separately. So they will.

“Let’s assume we do the refinancing,” Netts said. “If you don’t build the city hall, what are you going to do with that capital, those capital dollars?”

“Show me the money and I’ll tell you,” McGuire said.

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33 Responses for “Palm Coast Council Again Warms to City Hall Scheme That Would Snub Voter Permission”

  1. Ben Dover says:

    They already stole the money out of the water dept funds, and hung it around our necks with the 18% increase, God only knows what else these scheming thieves have done, between the 52 two red camera lights, selling booze, getting kickbacks from their contractor friends they keep busy ,with bogus jobs around the city, no telling what else this bunch is capable of, if they legalize medical pot in this state, this bunch would probably, cultivate every park in town ,and kick the kids off all the ball fields , making money for themselves and their friends is the only goal these greedy thieves have, you don t see them bringing any jobs to the area do you? Come election day this bunch has got to go, why would you build a new building when we have hundreds of empty ones around this place already, because they will get more kick backs from their contractor friends who will surely win the bids to do the work that`s why!!!!, They know their days are numbered here on the counsel and they want to get one last big pay day before they go

  2. Magnolia says:

    Another scam, just like the $8.2 million taken out of the water fund without taxpayer permission to finance a private development of the Super Wal Mart we will never see. The taxpayers are not your bank. This is illegal.

    These guys may have just “skirted the laws” here for the last time. The stealing from the taxpayers here must stop.

    It is time for a recall of this Mayor and a termination of the Manager’s contract.

  3. Donna Heiss says:

    What exactly do they not understand about NO! Bring it to the people again. See if the answer is still no. What are they afraid of? NO? So now they are just decieding to by pass the residents/voters because they want it? While you’re at it, make it 3 times bigger then the mess on Rt. 100, which I hear now needs major renovations. Nice! Tax hike from the city and county as well and not put where it’s needed most. UNBELIEVEABLE!

    Like a child going to grandma amd grandpa after mom and dad say no!

  4. Freddy says:

    Obviously a lot of citizens do not think the town center is the center of the city. Why not consider options closer to Palm Coast Parkway and maybe you will get better support for a new city hall. If our council members do not listen to their constituents maybe it is time for a voter recall election. New city manager that is not swayed by developers can also be considered.

  5. Marissa says:

    Landon (Outlandonish) and Netts (Nettsloss) are at it again just like screaming kids in a store who see something they want and scream until they get it.

    How much time is lost with Landon thinking this ploy up on the backs of taxpayer time. Why can’t Landon and Netts move on with more urgent City business. So, what your saying is this City is broke but we will take out a loan to build a new City Hall despite what the voter has to say. But, in the meantime, if the City needs additional capital after this loan – we’ll raise taxes.

    Hell No! We demand a referendum so we, the voters can decide. This is also illegal the way the Mayor and City Manager are going about with this idea. This City Hall thing can wait until the economy recovers. Why plunge this City into such debt like this.

    Next election Mayor Netts is gone and the City Manager needs to go. He had no trouble taking City workers out of the Florida Retirement System and putting them in a 401 to save money. Well, now you want to spend like a drunken sailor and raise taxes on our seniors. Get rid of this guy already!

  6. Dennis McDonald says:

    These two clowns Netts/Landon are thumbing their noses at the Taxpayers !
    Why is that ? Simple… Six Percent Netts was elect by 2850 votes out of 54,000 Voters in PC in 2011 and will be in office till 11/2016, UNLESS WE RECALL his IRRESPONSIBLE largess.
    It takes 2700 signatures of the PC Voters in 30 Days and History is made. The process to do this is in place and has been tested and described on http://www.palmcoastoversight.com This website contains contact information.
    Think about the benefits of having Netts GONE ! No more two hour meetings every week to set the agenda for the “bully pulpit” workshop where public input is not allowed. Why no input, because Our four Councilmen do not require it when they have the upper hand with a 4 to 1 vote. Truth is most Councilmen do not want Public Input. DeLorenzo works for the Homebuilder Assoc/Chamber of Comedy and took $$ from WastePRO, he has his marching orders. Ferguson and Lewis voted to whack us with a Giant utility increase while approving giving “special developers” Our $$ to fund private ownership. They seem to be Void of any common sense, so why would McGuire step off the curb it’s 3 to1 ? They are afraid of Netts/Landon the two most IRRESPONSIBLE members of this City Government, but WHY ?
    Who is the man behind the curtain ?
    The only way to find out AND save Our Tax Dollars is to RECALL NETTS which will slow the $$ wasting process until We can replace Lewis and Ferguson 11/2014 [15 months] then TERMINATE The City Manager of the Year.

    Opinions from the New Palm Coast.
    Dennis McDonald

  7. Ben Dover says:

    Freddy ……no cares where it would be built , we don t want them stealing more of our money to build it period , wake up sheeesh

  8. Just do it says:

    How many signatures do we need to recall this mayor and when can we start?

  9. Will says:

    1) The electorate has changed since the 2005 vote. Some moved away, some died, new people moved in. The “NO” vote in 2005 does is no longer valid in 2013.

    2) There are lots of people, I’d guess, who live close to Rt. 100 or south of it who do not think that anywhere on Palm Coast Parkway is really the city’s center. Of course the people north of PCP think so, but we have an odd shaped city with two linear business corridors, and people get used to going back and forth. City center or not, Town Center is a good place for a new city hall for a growing number of reasons.

    • Shocked, I tell you... says:

      Will, how many communities do you know where growth was generated by Section 8 Housing? This council just shot themselves in the foot when they allowed the builder to bail to government housing. That nice new section of houses you pass on the way to the movies? That’s now government housing.

      What’s happening here?

  10. fruitcake says:

    Why would they want to do this…it would be political suicide for all of them….

  11. Flaglerdude says:

    UNBELIEVABLE. I am so sick of these city officials. We don’t need a new city hall. WE NEED A BUS SYSTEM. All we want to do in this town is spend money on things that don’t matter. People are suffering in this community and the first way you create economic stimulus is to get a bus system. NO NO NO. I don’t mean the Flagler County Public Transportation elderly shuttles. REAL buses. Its okay though. We will just raise money for a new city hall. No one cares in this town. Just a whole bunch of close minded people that don’t want change.

  12. Anonymous says:

    If we can build it for the same money we spend in rent now (20K per month) I say go ahead, it will be better in the long run to own the building dow the road. This way future genorations can at least get some tax relief when it is all paid for, owning is better than renting if you can afford the payment.

  13. Mike says:

    Why not build it if it will not cost any more than we currently spend right now in monthly rent, $20,000 a month. The future would be better for the next generation of tax payers, they could save upwards on half million dollars a year in rent (if you include inflationary costs) with interest rates as low as they are and building labor costs low now would be the time to move on it. The main point would be can we do it for the same cost we currently pay now in rent, then in 10-15 years we can reap the benefits of no more monthly rental costs.

  14. What do u think says:

    Give me a refund on my taxes. Don’t spend the money on yourselves and don’t think u owe Town Center anything. Truly look to the future and if the $ From refi goes back to general fund, buy City Markeplace as that is, even over time, the more central location.

  15. confidential says:

    The City and County voters put these elected officials in our government and as soon as they laid their derriere on those seats they start lobbying and voting not for the majority constituents interest, to the contrary against us and in favor of selected developers, elite and their own pockets, what creates raising our taxes on our overwhelmed households to benefit them.

  16. Gia says:

    It’s a Shame at work. Free money does not exist. Each & every deal have been a disaster including special taxes break for supposedly new jobs at the cost of taxpayers. Palm Coast had a city building at one point………….

  17. Tired says:

    How much taxpayer money and staff time has Landon wasted over the last three plus years pushing to get his pet project approved? I can assure you that every single presentation that goes before council has several staff hours invested in rehersal and dress rehersal. Numbers are ommitted, facts discarded and motives are not always what they seem. I’ve asked this before but haven’t received an answer, how much money has the city already spent on design fee’s? On a project that has not been approved nor wanted by the voters? Obviously based on the Ethics Committee article Landon can do and say what he wants, local government has no accountability!

  18. Robert says:

    The first assumption is that there is approval from the citizens for a new city hall.
    Next there is an assumption that the city hall will be built in Town Center.

    For the most part all I see is empty space in Town Center. That build it and they will come mentality that a former council member espouses did not work too well for the county. They have a grand administration building. Where are all of the business that should be flocking to locate in Flagler county?

    This deal has already been hammered out in the back room. They are simply presenting it in the front room for all to see. These folks are going to ram a town hall down the citizens throats , like it or not. They don’t give a tinkers damn if the majority of citizens want or don’t want a new building.
    The votes are already in for the city hall. The mayor had this on his agenda for years. Mr.Lewis is all for it. And a builder’s lobbyist who would vote for (can you say interest conflict) anything construction, from a dog house to a replica of the county administration building. That’s 3 out of 5, makes no difference what the other two say or do.

    I don’t trust this group any further than I can piss up a rope.

  19. Ronnie says:

    It is time for our elected officials to run the city like a business.
    This spend, spend, spend attitude does no one any good.
    Most of us moved to this area because of it’s small town feel.
    As the city moves into this expansion, bigger is better mode
    we just wonder where it will all end. The residents who moved
    here for low taxes and basic services are now facing higher taxes
    and more spending by city officials with no end in sight. For a vast
    part of us this means looking for a better quality of life in a new town.
    This should not be the reality, bigger is not better.
    They say doing the same thing over and over and expecting different
    results is the definition of Insanity… PC is there.

    “Just look at all the big city’s declaring bankruptcy”

    • Shocked, I tell you... says:

      Take a close look at Detroit. This council is bent on expansion even though there are no homes being built in the developments they are approving. We have empty office space piling up all over town. We need a moratorium on building until we catch up.

      Otherwise, we will get stuck providing services like storm water to EMPTY DEVELOPMENTS. They’ve already raised our rates and they are going up again.

      Moratorium on new building! This is what happened to Detroit. Now property there is worthless and being bulldozed.

  20. Common Sense says:

    Oh, please. This is the same scheme they tried before.

    How about you do the refinancing and when you have the money in hand, every last penny of it, you ask the voters what they want to do with it?

    The council was elected to implement the will of the voters, not Mr. Landon’s harebrained schemes.

  21. FRANK DILIBERTO says:

    It is the RIGHT move! Town center IS the place for a new city hall. now IS the time to do it. Lets get started, look toward the future, stop paying rent, have a REAL city hall that we can be proud of, and for visitors to see what a great city this is! The people who are against it are more worried about a couple of bucks saved on their taxes than the future of Palm Coast. Jim and Jon, lets get it done!!!!
    Oh, and a City Hall does not need to be in the center of town, we all have cars now!

  22. Carl says:

    Two things are perfectly clear based on recent news articles concerning Palm Coast and reader feedback.
    1. Locals don’t want a new City Hall.
    2. Locals don’t want Red Light Cameras.

  23. Mark Juliano says:

    I say build it, and build it in Town Center. We already own the land it, will help generate jobs which we desperately need and will also aid in the development of Town Center. But most important of all, we as a City need a Home Base. A place whereby the residents and businesses of our community can always go to get done the things we all need to do. Build it and build it now, and make sure it is a place we can all be proud of and call home….

  24. Just do it says:

    How about everyone who wants the new city hall pay for it and let the rest of us be exempt from ever spending any money on it. Oh ya, in return for my exemption ill agree to never go there. And on that note, why would anyone feel ” proud of it “. To me that’s a crazy statement. Don’t want it. Don’t need it. and I will gladly sign a recall for Netts.

  25. PJ says:

    Ahemmm……. Let’s think about this for a minute!

    I don’t like the run away city government at Palm Coast.
    The “do as we please attitude” is epidemic in all the local elected officials. Bunnell, Flagler Beach are two prime examples that the opinion of the people does not matter.

    It takes just two or three politicians to make it seem that you and your stinking vote means nothing. Netts runs about town with Landon like they run everything. That is most all the complaint everyone likely has to say.

    On the side of business however?
    The City of Palm Coast must pay rent to have a building that provides services to us residents. If they take money from reserves or where ever to pay for it and the payment is within the budget then why should we really care?

    My problem is they way they bully us around and just do as they please. Landon and Mayor Netts just consider who you represnt and find a better way to communicate to us.

    You may even get some reluctant support. Like mine for example, I give some reluctant support and I’d rather stop paying rent to have a real City Hall……………….PJ

  26. Joe says:

    This deal has already been hammered out in the back room, they don’t care what the citizens say,, elections have consequences, remember this at the booth!!!

  27. Pete says:

    The council should act responsibly and fire their city manager! The council needs to be held accountable.

    • jimmythebull says:

      Recall, fire them all. Start over. They dont even know how to give out soliciting permits!

      Last week a home security salesman came to my door. He was trespassing because i have a no trespassing sign on my property.
      I showed him my sign and asked him if he understood the meaning of it.
      He said yes, but the city gave him a solicitor’s permit so he could go on anyones property.
      The city employee who gives out these permits needs to explain what a no trespassing sign means, and the permit doesn’t allow entering a no trespassing property along with a written statement explaining this in English and Spanish.
      These solicitors come from as far as Jacksonville and some can’t speak English.
      Last year, i sent an email to my councilman saying the same thing i’m now writing. I never got the courtesy of a response.
      In my opion, the city needs to concentrate on our SAFETY and QUALITY OF LIFE !
      The only thing that matters to them is a new city hall, more red ligt cams and their own police department.

  28. My Daily Rant says:

    If we don’t speak up they will spend every dollar we have.Remember M. Holland and the Crime she committed by spending $150.000 on a Marina at Marineland that is privately owned.The taxpayers got nothing out of this.These Politicians are just like Obama, spend,spend,spend.

  29. Joe says:

    Where is the petition, i’m ready to sign too… recall Netts!

    • jimmythebull says:

      Better yet, contact our State Rep. and start a petition to place on the ballot to unincorporate.
      No more city politicians,no more city taxes, zero red light cameras.

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